Paul Ryan’s budget resolution calls for slicing farm subsidies by $30 billion over the next decade.
Two cheers for good intentions. But is $30 billion the best that Ryan can do?
No, it’s not. In 2007, Ryan co-sponsored sweeping, bipartisan farm reform legislation that would have saved an estimated $55 billion over 10 years. When elements of the legislation were proposed as an amendment to the most recent farm bill, the outcome was predictable – the amendment was crushed in a lopsided, bipartisan vote by lawmakers determined to keep the farm subsidies gravy train chugging forward even as it inflates land prices, encourages overproduction on marginal land, and distorts trade.
Farm subsidies also enrich corporate farmland owners – along with a few Tea Party freshmen in Congress. Ten percent of farm subsidy recipients collect three-fourths of the dough.
Ryan’s resolution takes aim at fixed payments that are made regardless of crop prices and at the federal government’s single-payer crop insurance program.
There is plenty more to work with down on the farm, however, if Ryan really wants to wrestle the deficit beast to the ground. Farm subsidies are a thicket – impenetrable to all but policy aficionados – of commodity payments, crop loans, crop insurance, disaster payments, marketing assistance, and other boodle that in 2009 totaled more than $16.3 billion, according to the Environmental Working Group’s farm subsidies database, a mother lode for nosy fiscal voyeurs. Between 1995 and 2009, the total payout was a shade under a quarter trillion dollars.
Ryan said his proposed blueprint is not a budget, but a “cause.” Well, here’s a cause for him to embrace – a full-tilt campaign to reform the Rube Goldberg farm subsidy system from top to bottom.
And Congress shouldn’t put off reform in order to “maintain flexibility for the Agriculture Committee,” as Ryan’s resolution said. You “maintain flexibility” for that pork barrel committee and you can kiss farm policy reform goodbye. The committee is a stacked deck for the status quo. In 2009, nearly $3.1 billion in ag subsidies – almost one-fifth of the national total – were paid out to the districts of the committee’s 46 current members. The districts of Chairman Frank Lucas (R-OK) and ranking member Collin Peterson (D-MN) alone collected $390 million.
Just so you know, Ryan isn’t on the ag committee, but his district received $15.7 million in ’09.
A good framework for reform would be the 2007 bill, which would have provided IRA-like risk management accounts that would have given all farmers a safety net, not just those who grow corn and other favored crops. It would have cut off subsidies to any commercial farm with adjusted gross income exceeding $250,000 – a sensible cap that Ryan supported at the time. It would have redirected some of the savings to conservation programs popular with farmers.
One egregious subsidy it would have begun winding down is the “direct payments” program, which sends checks to owners of land that happened to have been farmed 25 years ago. The payments are made regardless of what the landowners grow, regardless of how much they earn from selling what they grow, and regardless of whether they grow anything at all. In 2009, direct payments cost more than $4.7 billion. Since 2002, direct payments have cost the taxpayers nearly $37.6 billion.
Another subsidy on the chopping block in the 2007 bill was “loan deficiency payments,” which are as bad as anything in the Tea Party fever swamp of fiscal horror stories. Farmers who grow eligible crops can collect the payments when market prices are below a mandated target price. Farmers, however, don’t have to sell at the support price. They can take the loan deficiency payments, wait for prices to go up, and then sell. Between 1995 and 2009, loan deficiency payments cost more than $30.5 billion.
For Ryan to have mentioned farm subsidies at all is progress of sorts. Congressional Republicans typically boil over with indignation when the topic is subsidies for things they consider politically incorrect, such as renewable energy. When it comes to farm subsidies, however, they find rationalizations (as they do for oil subsidies) for perpetuating wasteful government spending that would embarrass Nancy Pelosi.
Ryan has put the farm subsidies reform ball into play, sort of. Let’s see how aggressively he pushes it when he hears the inevitable excuses for doing nothing.